Athens Digest 26.02.2018

• Creditors’ mission gets to work today in Athens

• ECB chief supervisor insists Greek banks must do more on NPLs

• Government says credit line talk by Stournaras “not constructive”

• Poll gives conservatives lead, extreme right party makes gains

• New Democracy leader pledges to reduce both corporate and property tax and attract foreign investments

• Mitsotakis accuses Tsipras of piecemeal negotiations with Skopje

# The representatives of Greece’s international creditors arrive in Athens today to begin talks on the fourth and final review of Greece’s bailout programme. The agenda of the discussions will include the 88 prior actions the government must complete to wrap the 4th review. According to an unofficial briefing of the Finance Ministry yesterday, today’s meetings will focus on energy, followed by a program overview and privatizations. “We have concluded the third review on time. There is only one formality left. The institutions are now returning to discuss about the fourth review” MinFin Euclid Tsakalotos said referring to the outstanding e-auctions prior action for the completion of the 3rd review. Reportedly, the institutions are expected to ask for the upfront implementation of the 2020 fiscal measures in 2019, so that Greece meets the primary surplus target of 3.5 percent of the GDP. The mission is expected to last no more than one week.

# The European Central Bank’s chief supervisor says Greek banks must do more to slash the country’s high rate of non-performing-loans (NPLs). In an interview to To Vima newspaper Daniele Nouy insisted that despite the progress made after the stress tests in 2015 “Greek banks must do more and do it faster.” She noted that it was encouraging that Greece has introduced new laws that facilitate the settlement of these loans, but said that this was only the first step as they must also be implemented.

# Government Spokesman Dimitris Tzanakopoulos took a swipe at Bank of Greece Governor Yiannis Stournaras at the weekend saying that his comments that the country needs a precautionary credit line after the bailout program ends in the summer were nothing but an attempt of a “former finance minister to vindicate himself.” “Comments about a precautionary credit line are not constructive in the current circumstance,” he said in an interview to the Nea Selida newspaper. He also claimed that the country’s monitoring programme after August 2018 will be similar to the ones adhered to by countries which have already concluded their fiscal programmes.

# Conservative New Democracy has a 9.7 percent lead over ruling SYRIZA, according to the projected voter preferences from the first opinion poll published since demonstrations over the name dispute with the Former Yugoslav Republic of Macedonia and the outbreak of an alleged bribery scandal involving the Swiss pharmaceutical giant Novartis and prominent Greek politicians. According to the survey, conducted by Metron Analysis on behalf of To Vima newspaper, Kyriakos Mitsotakis’s conservatives got 34.9 percent, slightly down from 35.6 in a December poll, versus 25.2 percent for Prime Minister Alexis Tsipras’s left-wing SYRIZA, a slight rise from 24.4.
The survey also showed an increased projected result for extreme right Golden Dawn party with 9.4 percent compared to 6.5 in December. It was slightly above the new center left party Movement For Change which dropped significantly from 12 percent in December to 8.4 percent. The Geek Communist party (KKE) got 7 percent ahead of the Union of Centrists on 3 percent. Junior government coalition partner the Independent Greeks were below the 3 percent threshold to enter Parliament with 2.5 percent.
Moreover the economy was cited by 39 percent of those polled as the most important problem the country faces, while 19 percent said unemployment. The political system and politicians were the biggest problem according to 11 percent while 9 percent named Greece’s foreign policy with regard to the name dispute with the Former Yugoslav Republic of Macedonia as the most pressing issue. When respondents were asked to say which institution they trust on a scale of 1 to 10, the European Union got a score of 4.3 compared to 4.4 percent in May, 2017 – below the church, the justice system, the police and the army.

# Conservative leader Kyriakos Mitsotakis reiterated at the weekend that a New Democracy government will reduce corporate tax and slash the highly unpopular ENFIA property tax from the get go. Speaking to Skai TV, he said he will do this “immediately” and that it will be included in his government’s tax compliance policy. The New Democracy chief also pledged to create jobs by creating incentives for foreign investments with the introduction of a simplified and stable tax framework and a streamlined bureaucracy. “I will show in the first six months that I mean what I say,” he said.

# In the same interview, Kyriakos Mitsotakis accused Prime Minister Alexis Tsipras of conducting the name dispute negotiations with the Former Yugoslav Republic of Macedonia (FYROM) in a piecemeal manner. Mitsotakis derided Tsipras for not demanding at the outset of negotiations that FYROM revises its constitution, which includes references to a “Macedonian” language and identity. The New Democracy party leader said that Tsipras should have clarified that “if Skopje doesn’t change its constitution then we will discuss nothing more.” He also took a swipe at German Chancellor Angela Merkel for welcoming Zaev during his visit to Berlin last week as the “Macedonian” Prime Minister while negotiations are still ongoing. He said that Merkel’s reference was “not useful” in the current circumstances.

On our radar: Extremists take action again
Anti-establishment group members demonstrated outside the home of former Prime Minister Lucas Papademos who was seriously injured when a letter bomb exploded in his hands in May last year. Demonstrators sprayed red paint on the pavement outside his home and threw fliers with slogans in support to Constantinos Giagtzoglou, who was arrested last October on charges he sent the letter bomb to Papademos. He is also accused on sending letter bombs to Greek and foreign officials.
Moreover, some 30 members of the Greek anti-establishment group Rouvikonas (Rubicon) entered the premises yesterday morning of the headquarters of Swiss pharmaceutical Novartis in northern Athens, and used sledgehammers to smash its glass façade and threw paint on the walls.